Photo by Spencer Platt.
Corporate insiders are selling their stock at a record pace in the coming years as they prepare for potential tax changes and record high stock prices.
According to a report from The Wall Street Journal, 48 top executives have sold more than $200 million in stock this year.
The top stock sales this year have come from a number of people.
According to a report from The Wall Street Journal, record equity sales by top corporate executives have been spurred by soaring stock prices and potential changes in the US tax code.
48 top executives have sold more than $200 million in their company's stock through November, four times the average number of insider sales from 2016 through 2020. The top insiders at companies like Walmart, Microsoft, andTesla have sold a combined $63.5 billion in company stock this year, up 50% from 2020.
Larry Page and Sergey Brin are two of the many people who have sold their shares. According to the WSJ report, the tech sector has led the way in stock sales by insiders.
The surge in sales by insiders during the dot-com bubble is similar to the one we are seeing today. Insiders have historically been good market timers, buying stock near bottoms and selling stock near tops.
While record highs in the stock market have made it more appealing for insiders to unload their stocks and recognize profits, a potential increase in the long-term capital gains tax rate in Biden's Build Back Better legislation could also be incentivizing them to reduce their stakes and lock in
If the proposed tax hikes go into effect next year, corporate executives could save up to $8 million in taxes on every $100 million shares sold ahead of the effective date, representing a significant incentive to unload shares sooner rather than later.
If he stays true to his poll from earlier this year, Musk could have another $8 billion to sell if he sells 10% of his stake in the company.
Washington State is going to impose a 7% tax on long-term capital gains next year, and Microsoft CEO Satya Nadella sold his stock in order to avoid it.
People are opportunists. InsiderScore's Ben Silverman told The Wall Street Journal that the market is overheated.
Business Insider has an original article.
